Despite Major Promos In North America, China Turns In Highest Profits
After cutting its overall quarterly profit forecasts three times last year, Tiffany & Co. has reported that the China market has been integral to turning its lagging growth around with a 14 percent rise in first-quarter sales in the country.
The increase, which was significantly higher than 6 percent sales growth for the Americas, led to a total revenue growth rate of 9.3 percent in the first quarter. China also boosted regional sales, as Japan, the company’s second-largest market, only saw 2 percent growth as a result of currency depreciation.
The jeweler’s recent Asia strategy has involved new store openings and targeted advertising, and it has particularly been pushing expansion in China. This year marks a turnaround for the brand after disappointing silver sales in China last year actually dampened overall growth.
Tiffany’s hoped that North American marketing efforts revolving around the brand’s 175th anniversary and promotions tied into Valentine’s Day and the release of The Great Gatsby would help sales in the region, but China ended up the being the true savior. The company’s Gatsby– and anniversary-related marketing was not absent in China, as it provided jewelry for a Vogue China photo shoot using fashion from the film and heavily promoted diamonds in connection with the anniversary.
Chinese demand for hard assets such as jewelry continues to be high, as evidenced by skyrocketing gold demand last month that saw long lines out the doors of jewelry stores and emptied inventories throughout the country. China’s notoriously high diamond demand has been projected to slow from 20 percent to 10 percent this year, but has seen a rise in demand for mass-market stones.